Main Streets across the World 2023

MAIN STREETS ACROSS THE WORLD 2023 | 31

GLOBAL TRENDS AND INSIGHTS 03

DOU B L I N G DOWN ON E X P E R I E N C E

To say the luxury sector has not been impacted by current economic conditions, would be wrong. The latest earnings figures for major luxury retailers have generally undershot market expectations. This is undoubtedly due to at least part of their customer base, which was inflated because of pandemic-related fiscal stimulus, being eroded as households have redirected spending elsewhere.

Unfortunately, a side effect of people finding it harder to make ends meet has been an increase in the amount of crime, especially theft. In the U.S., this amounted to USD 112 billion in 2022, a 20% increase from 2021 according to the National Retail Federation. 8 Such activity is occurring across a wide variety of price points—the result being margin erosion for a range of retailers. Accordingly, brands have had to increase their in-store security with a recent survey highlighting that brands are expecting to increase their security allocation budgets by an average of 28% over the next three years. Furthermore, one in five are expecting to increase their allocation by more than 40%. 9 While technologies such as RFID and AI are part of the solution, the amount of in-store security personnel will also need to be increased. Of course, the challenge is how to achieve greater security without impinging on customer experience.

[8] https://nrf.com/media-center/press-releases/retail-crime-accounted-over-112-billion-industry-losses-2022-according [9] https://luxus-plus.com/en/security-a-growing-problem-for-luxury-brands/

CUSHMAN & WAKEFIELD